How does North Dakota routinely balance the budget each year while B.C. and other Canadian provinces and U.S. states flounder in debt?
It’s a simple formula. North Dakota deposits tax revenue in the state’s publicly-owned bank. It pays its current expenses without donating the people’s money in interest payments to commercial banks.
Canada’s federal government, by contrast, fattens the banks with interest payments that amount to massive annual gifts, while pleading poverty.
Meanwhile, the state-owned North Dakota bank accepts deposits from government and citizens, and, since its launch in 1919, has added muscle to the regional economy by making business loans with a solid repayment rate. In 10 years it channelled some $300 million in profits into the state treasury.
This conservative Republican state successfully practises a system that devout “free-market” believers would call socialism. And yet the Bank of North Dakota collaborates with commercial banks.
Publicly-owned banks obviously are not a stand-alone fix for a world economy on the edge of breakdown. But they may help in the revolutionary rebuild which some people think is bound to come.
Arguably a variant of the North Dakota model would work in Canada. At the federal level the neglected Bank of Canada already exists. Putting it to full use would save billions in taxpayers’ money.
At the provincial level, B.C. and other provinces could launch public banks. Yes, the constitution declares money and banking to be federal territory, but inter-government horse-trading has already bypassed the documents and has built an informal sector of the constitution.
Health care is one example of joint provincial-federal action. The optimistic view is that it will not continue to be as clumsy and splintered as it is at present.
Common sense negotiation can create a system of federal and provincial banks that safeguard taxpayers’ money against private-sector raids, if and when political pathfinders pull free from the tangled web of objections woven by bankers and supporting economists. That’s a big “if and when,” but it can be done.
Retired teacher Will Abram sounds a Canadian wake-up call in videos that you can easily find on YouTube.
Another challenge comes from an American thinker Ellen Brown on her blog Web of Debt.
This is a good time to examine their arguments. Abram piles up numbers to dramatize what he sees as the commercial bankers’ massive robbery of taxpayers’ dollars through payment of interest on the national debt — a gift to the private sector of $137.4 billion in four years.
He wants government to take back a dominant part in the job of creating money, which has been hijacked by the commercial bankers.
If Liberals or Conservatives made the bold step of restoring full life to the Bank of Canada and creating public provincial banks, they would earn some popularity points, but they would stir opposition from the banking lobby.
Therefore my hunch is that they won’t do it. A far-reaching change of this kind would fit in with the traditions of the NDP; but it is dangerous for an opposition party to put such an inventive idea into its platform.
A hostile government may ridicule the proposal, and make it look dreamy and impractical, or else steal it and hollow it out.
If a progressive idea such as a publicly owned bank looks promising and gains some intensely committed popular support, then a right-wing government, such as B.C.’s current regime, might enact the measure in weak form, such as a provincial bank licensed to receive only a small fraction of government revenues, for example.
—G.E. Mortimore is a Langford-based writer. Think About It runs every second week in the Gazette.